Tech stocks decline amid Democratic midterm victories and AI spending concerns

Technology stocks experienced sharp declines on Thursday, November 5, 2026, as investors reacted to the results of Tuesday's U.S. midterm elections and growing concerns regarding the durability of the artificial intelligence (AI) boom.

Market Performance

Major U.S. indices saw significant movement during Thursday's trading sessions:

• Nasdaq Composite: Reported a decline of 1.99% to 25,225.3, according to JournalArta Markets. Other reports noted the Nasdaq 100 dropped 5% in mid-morning trading, reaching its lowest level in five months, according to NBC News.
• S&P 500: Fell 0.95% to 7,615.65, according to JournalArta Markets. Other reports indicated the index fell 1.2% in early trading, according to The Associated Press.
• Dow Jones Industrial Average: Remained relatively stable, with JournalArta Markets reporting a 0.11% gain to 53,412.2, while NBC News reported a drop of nearly 700 points.

AI and Regulatory Concerns

Investors are expressing concern over whether AI will generate the productivity necessary to justify massive investments in chips and infrastructure. This sentiment was compounded by the Democratic Party's victories in the midterm elections.

According to NBC News, numerous Democrats who won seats for governor, attorney general, Senate, and House have pledged to "slow or halt the construction of AI data centers." Markets expressed particular concern regarding Texas, Ohio, Michigan, and Georgia, which are large data center markets.

Additionally, the build-out of AI data centers faces pressure from the rising cost of borrowing money, according to The Associated Press.

Semiconductor and Tech Sector Impact

The sell-off was triggered by lackluster earnings reports from major chipmakers Qualcomm and Arm Holdings, according to NBC News.

• Nvidia: Shares fell 4.1% according to The Associated Press, while NBC News reported a 7% decline, marking its largest one-day drop since April 2025.
• Advanced Micro Devices (AMD): Tumbled 10.7% according to The Associated Press, while LancasterOnline reported a 13.1% drop.
• Qualcomm: Fell over 9% according to Proactive Investors.
• Arm Holdings: Slipped around 15% according to NBC News.
• CoreWeave: Fell 6.8% according to The Associated Press.

Other notable declines included SpaceX and Tesla, which each slid around 10% in response to the midterm results, according to NBC News.

Why it matters

The volatility in tech stocks highlights the market's sensitivity to both corporate earnings in the AI sector and the potential for new regulatory hurdles following the Democratic midterm victories.

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Sources

• nbcnews.com: Tech stocks plunge 4.5% over worries about AI and midterms
• theglobeandmail.com: More drops for Nvidia and other AI chip stocks erase Wall Street's rally from the day before - The Globe and Mail
• theguardian.com: US tech stocks recover after selloff spooks investors over AI spending | US markets | The Guardian
• lancasteronline.com: More drops for Nvidia and other AI chip stocks erase Wall Street's rally from the day before | Stock Market | lancasteronline.com
• proactiveinvestors.com: MARKETS LIVE: Wall Street splits at open as severe tech liquidation triggers defensive rotation | LSE:TGR, OTCQX:TGRHF
• journalarta.com: Stock Market Today: Nasdaq Falls 1.99%, Dow Gains 0.11% — JournalArta Global

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.